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July 2, 2014

Reimagining the “Brain Gain”

By Alicia Brindisi

Discussions of migration and remittances often revolve around statistics that illustrate the sheer scale of migrants (231 million in 2013) or money flows ($404 billion that same year). But each one of the 231 million migrants is a person who leaves family members, friends, and the familiarity of their culture, and many of them retain strong ties with their home communities, sending money but also exchanging information. Sociologist Peggy Levitt studies these information flows and refers to them as social remittances. Social remittances are “defined as ideas, know-how, practices, and skills that shape their encounters with and integration into their host societies…and promote and impede development in their countries of origin.” They can come in the form of norms, practices, social capital, and identities. Unlike their monetary counterparts, social remittances are difficult to quantify and not yet well understood.

Michael Clemens and Timothy Ogden’s reframing of the remittance research agenda proposes thinking of migrants and their sending families as part of one household unit. While they may be separated geographically, they are connected financially and socially, through the transfer of money and exchange of ideas and information. Especially today, a wireless connection and a chat application like Skype or WhatsApp allow for voice, picture, and text exchanges essentially free and in real time.

Levitt and others describe both positive and negative effects of social remittances on the development of receiving countries. For example, she observed an immigrant community in Boston playing in a local sports league that used vendor contracts and organized game schedules. Sharing these structures with members of their home village spurred those back home to pressure local government officials for new recreational facilities and accountability mechanisms in contract enforcement. However, some community leaders in the sending country fear “that migrants import values that weaken families, deify consumerism, and encourage sexual permissiveness.”

How do social remittances interact with money remittances? Does the exchange of new information and ideas affect household financial decision making? The short answer is we don’t know. But we may have some hints. Jean Lee recently wrote about three papers studying migrants and migrant households that receive financial literacy training. All three studies show some impacts on either the migrant or the receiving household changing financial behavior or improving savings, knowledge, and other behaviors. For example, in the Seshan and Yang study, wives of Indian migrants working in Qatar were more likely to seek out financial literacy training if their husbands had received training themselves while abroad. The flow of information and the knowledge sharing from the trainings may have contributed to these behavior changes.

Levitt’s work speculates that information exchanges at the local level can have a broader, even national impact. (For example, changing attitudes about contraception brought home via migrants could affect fertility rates.) In light of this possibility, there is still a lot left to discover at the intersection between social and monetary remittances. How will the transmission of information about financial structures, tools, and systems change behavior in receiving countries? Just as the migrants in Boston spread the word on contracts, perhaps they (and others) will share ideas on financial innovation.

Read below for more on social remittances and the impact of migrant information flows: